Excellent piece from Ben Heineman Jr., a Senior Fellow of the Program on Corporate Governance at Harvard Law School, on Walmart’s Global Compliance Report and the state of the company’s FCPA investigations. An excerpt:
What is missing [from the Global Compliance Report], in my view, is a powerful statement by the CEO that he is the leader of compliance in Walmart—and a companion, deeply-felt statement by the board that this is a core CEO responsibility. The Report is replete with redrawn organizational boxes and organizational detail. But, an integrity culture is simply not possible without CEO commitment to integrity as a bed-rock company goal, and to driving compliance deep into the organization through personal action and reviews. In both the current Annual Report and Proxy Statement, there are rather pro forma statements, but not a sense of real personal commitment from the CEO (as opposed to the Audit Committee) or the board. Similarly, the company must make clear the related point that the top operating business leaders are the chief integrity and compliance leaders in their sphere—that they must make this issue a reality by their own personal actions and leadership.
Walmart’s bribery scandal, and the sweep of the current investigation, have made this case a poster-child for the snares of corruption facing global companies, putting it in the same category as the towering bribery scandal faced several years ago by Siemens. Many boards and CEOs from around the globe cite corruption as one of the top issues they face in current globalization efforts—in this sense, “the whole world is watching” the Walmart case carefully.
With its Global Compliance Report, Walmart has written an important chapter in this saga. But, until the results of the investigation are made public and the government’s response revealed, the story—both on past accountability and future governance—is far from over.
Read the whole thing here.